India has reason to be pleased with the outcome of the Seventh G20 Summit, which concluded here on Wednesday.
First, Prime Minister Manmohan Singh ticked the Europeans off for landing themselves and the world economy in such a big mess and then expecting handouts from even poor countries.
Second, the Prime Minister’s consistent stand, that growth and austerity have to be combined, has also finally found favour.
Growth emphasis
The 14-page Declaration strongly emphasises the need for growth because, by itself, austerity will not solve the debt problem of the Eurozone. Britain and Germany have been insisting on austerity first to set Eurozone in order.
Third, the Summit declaration included for the first time investment in infrastructure in the developing countries in the preamble. India has been pushing for this at the last three Summits.
Fourth, the Declaration has also called for ending what it calls mechanistic reliance on credit rating agencies, and encouraging transparency and competition amongst them.
Fifth, although no one is saying it openly, there is a distinct sense amongst the officials that the developing countries have improved their clout this time. This is evident from, amongst other things, agreement that IMF quota reform should be speeded up from 2013.
Overall, the non-European members of the G20 have succeeded in sending a strong message to Europe that enough is enough and that it has to end its nationalistic bickerings so that the Eurozone’s finances can be supervised by a triumvirate comprising the European Central Bank, the IMF and the EU.
Key to this is the acceptance by European countries to subordinate their financial institutions to an outside agency. The G20 has also explicitly recognized the progress made by China in market-determined exchanged rates, and the gradual appreciation of the Renminbi. The U.S. will now stop targeting China’s exchange rate policies.
The next G20 Summit is in 2013 with Russia as the new chair. Reacting to the Communique, the Prime Minister has said, ``Eurozone leaders… recognize the need to move beyond the present monetary union towards unified banking supervision and adoption of common and enforceable fiscal rules.’’
Keywords: G-20 summit, Los Cabos, Manmohan Singh, India at G-20, India international relations, eurozone crisis, global financial crisis, EU bailout
Its good that they have opted for such policy atleast now, which can give bring the chaotic financial situation in order. But, I dont understand why they have not adopted austerity long before?
The cause of world-wide economic slowdown is simple - 1) the
populations in western countries are again and retiring and require
health care, Social security from state and Govt's are running out of
money. 2)A few rich and powerful in west became more richer by hedge
funds,gambling with retirement savings of others 3)Huge redistribution
of wealth by the Rich and big business houses who openly flouting laws
and cheated to become more big and powerful. 3)In developing
countries,the issues are same and we additionally have massive
corruption and looting of public wealth by Politicians and big
business houses. Best way for Countries to get out of recession is
that Govt should have a strong leadership and law and order & start
massive projects like Nuclear, water ,irrigation projects sanitation,
new and good quality roads, Steel plants wherever we have good supply
of Iron ore, Good schools, medical facilities, sports facilities etc
and this would automatically trickle down and create jobs.
Good thing to get away from credit agencies ... they seems to pushing more of a propaganda rather than true ratings ...
The incessant Europe-bashing, while giving the US a complete break, is uncalled for. Most European nations have manged to provide a high standard of living for its citizens, including free education and extremely subsidised health care. That Europe -- a continent riddled with wars for centuries -- has been largely peaceful during the past several decades has much to do with the effort put into forging a union. India, in contrast ranks abysmally in all indices of human wellbeing. Those living in glass houses should think twice before throwing stones at others.
They should have taken these steps long ago. Thanks for opening eyes atleast now. Hope we come out of this crisis asap, which is very critical for our economy.
Greed & Growth, there is a thin line seperating both. Growth when not inclusive and balanced with the proper ingredients like regulation, self discipline, a measure of austerity, empathy for others(especially the less priviliged) can be the recipe for disaster as proven by the Eurozone crisis.
An example of this is when the same banks/corporates that are defaulting and under pressure pay exorbitant bonus packages to their executives!
It is this type of growth bordering on greed that will bring down the whole planet.
The world has to devise new ways to measure growth rather than basing it on only economic(financial) data.
Growth has to be more inclusive & sustainable!
Whatever crisis Europe and US faced in the recent past can be attributed corruptive or uncontrolled spending and uncontrolled outsourcing as well. Europe will need to protect employment by controlling outsourcing, and that is what EU and US are going to do. So there is nothing much India can smile about
Excellent article except the bit about our PM ticking off the Europeans. Smacks of some kind of an ego problem somewhere, akin to the brown man having stood up to the white. When the global economy is in such dire straits, including ours (with rampant economic misgovernance as a major contributor), one should leave egos behind and earnestly look for solutions.And knowing our mild mannered and erudite PM, that's exactly what he would be doing.
It is good to see India taking a stand on its own. Although I am still quite doubtful of response in the action of European countries.
If the Prime Minister of India had the guts and resolve to implement atleast ten percent of the sermon he delivered aborad, India would not have been in the current state of affairs. Of late, Indian leaders make great statements abroad.
These are times when we feel proud to have a economic wizard heading our country.
This smile costed India $10 Billion.
They should have taken these steps long ago. Thanks for opening eyes atleast now. Hope we come out of this crisis asap, which is very critical for our economy.
A very special thanks to great economist prime minister of India for
recognizing himself as a best member of G-20 summit. If G-20 summit
policy would be done in efficient way then it would surely solve the
fiscal problems, global financial crisis.
Can Indian really smile when there is so much corruption,nepotism and inefficient machinery.
Every thing is run like a puppet show because people never watch the puppeteer. We
Indians are definitely weeping
While Mr. Singh ticked off the Europeans, he should do the same
with his cabinet ministers here in Delhi. I don't know what holding
him back from doing so. He is the face of the nation in the global
world and his role in G-20 summit this time is commendable. But
then, why can't he show the same command here in his own nation.
So finally the countries part of G-20 have started believing in their own capabilities rather than the opinions of the rating agencies. India's (I grudgingly admit Mr. Manmohan Singh) has taken its stand for investment in infrastructure is quite laudable. And also, now I am glad to know that we (G-20 members), and most of all U.S., have decided to take a leaf out of China's economic policies and have decided to stop targeting it.But in all this, transparency is a must, as said above.
What about internal economic problems? Government needs to take immediate steps to reform slugging economy & shut up immature allies who constantly drag country & government in brink by not allowing bold steps like 100% FDI in retail sector. They think India is still in 1980s!
This is typical Indian self-congratulatory journalism. The themes of
growth and austerity have been around from the past year and as such
the Europeans did not need our PM to suddenly discover its virtues.
The focus on infrastructure in developing world is nothing but a page-
filler, because the West does not have money to invest anymore! In
yesterdays column by the same author, he made it sound that the
Europeans were stunned by our PMs admonishment. Note that G20 members
know that this is PM heads a country that has developed-country growth
rates and as such is nothing but a paper-tiger.
Excellent dig, Sir..!! Indeed you did India proud. Our citizens should also feel elated about the situation. There is bound to be some mindless comments from few quarters, attributed due to lack of awareness in Macro-Economics; but then we need to have some such comments to make ourselves feel more knowledgeable.
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